UK P&I CLUB N.V. & Anor v REPÚBLICA BOLIVARIANA DE VENEZUELA

A third party’s direct claim against a liability insurer is characterised by its substance, not by its description under foreign law. Where the claim substantially mirrors the insurer’s contractual liability, it is subject to the insurance contract, including its arbitration clause and contractual defences. A claim said to arise from statute or tort is not thereby independent.

State immunity from adjudication and immunity from enforcement are distinct. The State Immunity Act 1978 removes adjudicative immunity where a commercial-transaction or arbitration exception applies, but section 13(2)(a) separately prevents injunctive relief against a state. That prohibition is compatible with article 6 ECHR and cannot be read down to permit an anti-suit injunction against a state engaged in commercial activity.

The claimants, insurers of the cruise vessel RCGS Resolute, sought a final anti-suit injunction restraining Venezuela from pursuing claims in Curaçao and Venezuela arising from the collision and sinking of the Venezuelan patrol vessel BVL Naiguatá.

The claims against the insurers were advanced in Venezuela as tort claims based on Venezuelan maritime and civil law. Venezuela contended that its alleged direct right against the insurers was independent of the insurance contract and that it was immune from the English court’s jurisdiction and from injunctive relief.

The court had to determine whether the Venezuelan claims were contractual in substance, whether the commercial-transaction or arbitration exceptions to the State Immunity Act 1978 applied, and whether section 13(2)(a) barred a permanent anti-suit injunction.

1. Characterisation. The relevant question was the nature and essential scope of the right asserted against the insurer. Its description as statutory, tortious or strict liability was not decisive. The authorities concerning direct actions by third parties against liability insurers established that, where the direct right substantially depends on the insurance contract, the claim is contractual in substance and subject to the contract’s arbitration clause and terms.
2. Venezuela had an arguable direct-action right under Venezuelan law, but the court concluded that any such right based by analogy on motor-vehicle insurance was subject to the insurance contract. Contractual defences were therefore available, although personal defences against the insured were not.
3. Anti-suit jurisdiction. The claims in the Venezuelan court were subject to the London arbitration clause. Venezuela, by claiming according to the insurance contract, was treated as having agreed in writing to arbitrate for the purposes of section 9 of the State Immunity Act 1978. The commercial-transaction exception in section 3(1)(a) also applied because the claims were ordinary private-law claims enforcing liability under a commercial contract.
4. Enforcement immunity. Sections 1–11 of the 1978 Act concern adjudicative jurisdiction, whereas section 13(2)(a) confers a separate and additional immunity from enforcement measures, including injunctions, even where adjudicative jurisdiction exists.
5. Section 13(2)(a) engaged the claimants’ article 6(1) ECHR right of access to court, but the restriction pursued legitimate objectives and was proportionate. There was no clear and settled rule of customary international law requiring states to be subject to anti-suit injunctions in relation to non-sovereign activity. The United Kingdom’s approach lay within the range permitted by current international standards.
6. The section was also justified by domestic policy, international sensitivity and comity. The claimants retained arbitration, declaratory relief and possible compensation for breach of the arbitration agreement. Section 13(2)(a) could not be read down under section 3 of the Human Rights Act 1998, since the proposed modification would amount to legislative amendment.
7. The claimants therefore established that Venezuela’s Caracas claim had to be brought in London arbitration, but they were not entitled to a permanent anti-suit injunction against Venezuela.

The judgment records an earlier interim decision by HHJ Pelling QC, sitting as a High Court judge, which held that Venezuela was not immune and granted interim relief: [2021] EWHC 595 (Comm). The present court determined whether that relief should be made permanent and resolved Venezuela’s immunity and jurisdiction objections.